Total seeks ways to make Shtokman project profitable to develop

4/4/2013

Total seeks ways to make Shtokman project profitable to develop

BY INTI LANDAURO

PARIS -- Total and Gazprom are seeking ways to make the Shtokman natural gas field, in the Russian Arctic, profitable to develop, Total's CEO said. "We are seeing whether other technologies can be used to make the field cheaper," Christophe de Margerie told reporters on the sidelines of an oil conference in Paris.

If preliminary results are satisfying we will set up a schedule, if not we will abandon it. The good thing is that we keep talking with Gazprom, he said. Last year, the Russian company shelved attempts to develop the gas field, which is estimated to hold almost 4 Tcm of natural gas, as technical studies indicated the project wasn't financially viable.

Gazprom teamed up with Total and Statoil to develop the field, with Gazprom holding 51% of the partnership, Total 25% and Statoil 24%. All three partners had agreed Shtokman was too expensive to develop and there had been no conflict between them, Mr. De Margerie said.

Launched in the 1990s, Shtokman has been repeatedly delayed because of disagreements between the partners over investment terms, and because of the extreme Arctic conditions. The project also lost attractiveness because the boom in the shale gas industry in the United States disrupted the natural gas market, bringing prices down. The three partners invested millions of euros in the project, which was due to include extraction infrastructure as well as a gas liquefaction plant.